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Watch video three in our video series Where To Buy Rental Properties In Birmingham AL.
Spencer Sutton and Matthew Whitaker here to walk you through the third video in our installment of Where to Buy Rental properties In Birmingham AL.
Today we are going to discuss the following areas:
- Helena
- Alabaster
- Pelham
- Calera
These areas are all south of Birmingham and the homes are newer than those found in closer to the center of the city.
If you are wondering where to buy rental properties in Birmingham AL, then this video will give you insight into a very popular area.
Age Of Home
These areas are built in the ’90s and early 2000s. Most of these houses are at least three bedrooms and two bathrooms. they also have more modern amenities like living rooms and dens. Many have two car garages and finished basements.
These houses are different than the ones we have discussed earlier built in the ’60s and ’70s.
Profile Of Tenant And Rent
In these areas, your tenant will stay in these houses an average of two to four years. The tenants are more transient by nature as they look to buy somewhere down the road.
What kind of rent can you expect in this area?
The sweet spot is around $1,200. Some exceptions will allow you to rent a home for $2,000 or $2,500 but that is going to be a newer home and it will be a large home.
We are managing more and more of these homes as institutional investors are buying in the area. We also have more international investors looking for new properties south of Birmingham.
Helena is one of the hottest areas in Birmingham because it’s growing like crazy.
Two things an investor needs to aware of when investing in these areas:
- Although the prices of the homes are going to be more expensive, you will experience both price appreciation as well as rent appreciation over time. In the older areas of Birmingham where investors are buying low to moderate income houses, there isn’t any price appreciation. They will experience rent appreciation over time but most of these houses will not appreciate or be sold on the retail market as easily.
- Because the houses are more expensive, the taxes are also more costly. Especially when you consider that non-homestead taxes are double homestead taxes. It’s important that before you buy, you are clear as to the amount of taxes you will be paying each year. If you are expecting taxes to be X and they end up being double that amount, it will change your proforma.
Let us know if we can help with any of your property management needs. We would love the opportunity to work with you.
Spencer is the VP of Marketing at Evernest. He wakes up with Google and Facebook on his mind. Having bought and sold over 150 homes in Birmingham, Spencer gets a kick out of helping new and seasoned investors navigate the mistakes he made as an investor. Spencer is also passionate about his love for Michael Jordan and does his best to explain to the Millennials (who never saw him play live) how much better he was than LeBron. He loves to hang out with his wife, kids, and the world’s best black lab, Jett.